Annual Report

Annual Report 2005


International Symposium
"The sustainable international framework on climate change beyond 2012"


1. DATE: November 12, 2004 (Friday) 10:00 - 17:10
2. PLACE: Roppongi Academy Hills 40
3. PURPOSE: The Symposium is to identify what viewpoints will be vital for building a sustainable international framework on climate change for the future, and what actions will be needed to implement such a framework, through the lectures and panel discussions among the experts of developed and developing countries.
10:00-10:05 Opening Address: Kotaro Kimura, Executive Director, GISPRI
10:05-10:30 Keynote presentation:”Sustainable Future Framework on Climate Change”
Hiroyuki Fukano,
Deputy Director-General for Global Environment Affairs,
Ministry of Economy, Trade and Industry
10:30-11:10 Presentation 1:”What Makes Greenhouse Sense?”
Thomas Schelling (USA)
Distinguished University Professor, Emeritus
University of Maryland and Harvard University
11:10-11:50 Presentation 2:”Climate Change Strategies to 2012 and beyond”
Michael Grubb (U.K.)
Associated Director of Policy, The Carbon Trust
11:50-13:20 (Lunch Break)
13:20-14:00 Presentation 3: “Kyoto Plus”
Scott Barrett (USA)
Professor, School of Advanced International Studies,
John Hopkins University
14:00-14:40 Presentation 4:“International Climate Regime: Major Considerations on Post-Kyoto”
Zou Ji (China)
Professor, Renmin University of China
14:40-15:20 Presentation 5:”Coalition for Climate Technologies to Flank Kyoto Process”
Taishi Sugiyama (Japan)
Senior Researcher,
Senior Researcher, Central Research Institute of Electric Power Industry
15:20-15:35 (Coffee break)
15:35-17:05 Panel discussion
(Coordinator: Mitsutsune Yamaguchi, Professor, Faculty of Economics, Keio University)
17:05-17:10 Closing address: Hiroshi Yoshida
Director, Global Environmental Affairs Dept., GISPRI

(1) Participants of the Symposium:
Total 238 people (excluding lecturers, METI and GISPRI staff)
Including: 129 Industries
  10 Government
  63 Research institutes
  15 Think-tanks
  5 Media
  9 Faculties of universities and colleges
  4 Students
  3 Foreigners

(2) Photos from the conference:

(3) Keynote presentation: “Sustainable international framework on Climate Change for the future” by Hiroyuki Fukano, Deputy Director-General for Global Environment Affairs, Ministry of Economy, Trade and Industry, introducing the Interim Report of the Expert Committee on the Review of Future Framework, under the Global Environment Subcommittee of Environment Conference, reporting to the Industrial Structure Council
<<Presentation Summary>>
- Emphasized the importance of developing and further enhancing the Kyoto Protocol, based on the learning from the experiences of that Protocol.
- Summarized the current trends and approaches of the international community on climate change issue (US, EU, Russia, China and India). For example, CO2 emissions increase in the US is likely to attribute to about half of the total emissions increase of all developed countries since 2000. According to the model calculation, China will become the world's largest emitter by 2030, surpassing USA in their CO2 emissions.
- Even if the Kyoto Protocol’s emission targets are fully achieved, global emissions will increase by about 30% in 2010 compared with 1990.
- As incentives for developing countries to participate in emissions control, developed countries must promote smooth and immediate transfer of technologies to these countries, and, as a measure to realize the substantial emissions reduction, it is necessary to develop and disseminate innovative technologies.
- Future target should be the one in which each country should commit to adopt concrete measures that would conform to its own policy priorities.
- Since the overall emissions in the world will determine the overall effects of climate change, there must be quantitative targets on the global emissions total. This will be the sum of potential reductions achievable through the commitments to take concrete measures.
- In order to advance the “commitments to take concrete measures in the future” in the forum of international negotiation, major emitters need to lead the discussion of the issue, major stakeholders need to be involved in the decision-making of energy and industry policies, and industries and NGOs need to be invited to participate in the discussion.

(4) Presentation 1: Thomas Shelling (USA)
<<Presentation Summary>>
- The 2004 presidential election ended with the reelection of President Bush, but the election outcome would not have made any differences in US’s climate change policy nor departure from the conventional policy path, even if the opponent Kerry won the election.
- It is the consensus of American scientific community that the climate change is an extremely serious issue. It is a very new issue, which did not exist 25 years ago.
- Climate change issue involves many uncertainties, demanding a long term viewpoint.
- A simple example to illustrate the uncertainties: the Committee of the National Academy of Sciences in the United States published a scenario back in 1979, which said, if CO2 concentration were to double, the surface temperature would rise between 1.4 to 4.5 degrees C. Since then, enormous amount of money were spent in the study of this subject, yet the outcome is still the same.
- The most vulnerable to any drastic temperature rise due to global warming would be developing countries and the agriculture sector. US is not likely to face climate change as an immediate problem.
- For addressing climate change issue, it is essential to have international cooperation led by developed countries.
- The commitments to absolute quantitative targets are not the way to go. Focus should be on the commitments to “actions”. Such action-oriented measure may provide a way out of a grid-lock in building an international post-Kyoto regime.

(5) Presentation 2: Michael Grubb (UK)
<<Presentation Summary>>
- Climate change is how to manage the risks of international community.
- To make an example, UK's climate change policy is to seek effective measures through the mix of instruments. One interesting experiment is the establishment of a Carbon Trust.
- The Carbon Trust aims to help British industry move toward a low carbon economy. It has programs to develop new innovative technologies, and to help disseminate existing technologies through UK businesses.
- Technology is the answer for climate change issue. Technology development takes time and requires financial assistance from the government, but its costs can be reduced through scale-related learning-by-doing.
- It is possible to drastically reduce emissions through the combination of domestic policies and technologies.
- The best international framework will be the one that incorporates flexibilities into domestic targets and integrates strategies by combining short term and long term measures.

(6) Presentation 3: Scott Barrett (USA)
<<Presentation Summary>>
- The world can be divided into two worlds. One is one single earth that has ozone hole and global warming etc. Another is the world representing the geopolitical map of the earth. Those two worlds must be reconciled.
- The number of countries that have ratified UNFCCC is overwhelming, indicating the global consensus on avoiding danger in climate change.
- The problem is the difficulty in defining “dangerous” level. What is the level of concentration in ppm or what is the threshold (point of irrevocable change) in which discontinuities, such as the destruction of coral reefs, splitting off of West Antarctic Ice Sheet, or collapse of thermal haline circulation, may occur? Focusing on targets in terms of concentration is not helpful.
- Climate change is a long term problem. We need to transform the kinds of technologies we are to use in the future. We must take actions now that will make it more attractive to take actions in the future. We need to invest in R&D to reduce the costs of future technologies.
- The future framework must adopt strategic measures, where actions taken by some countries invite other countries to take actions, too, so to create a positive feedback.
- Kyoto Plus proposal emphasizes research and development for strategic purpose and induces the changes in behavior. The proposal includes the technology standards for the world, which create commercial incentives to diffuse technologies.
- No matter what we do, there will be climate change. An agreement on climate change needs to incorporate adaptation measures, especially for developing countries.

(7) Presentation 4: Zou Ji (China)
<<Presentation Summary>>
- The climate protection is an important issue that requires international cooperation, but human development and poverty alleviation are also central in the international community.
- The living standards of those in developing countries (especially in their rural areas) need to be improved to reach the level of developed countries.
- Scientists have not been able to provide definite conclusions on the stabilization levels of atmospheric GHG concentration. There is still huge uncertainty.
- Developing countries like China values Kyoto Protocol, despite their weaknesses, as the starting point in promoting international cooperation to enable “sustainable development.”
- Developed countries may be able to adopt “top-down” approach, which is to impose quantitative and legally binding targets, so to keep the Protocol. Developing countries can introduce efforts by “bottom-up” approach, which provides guidance without citing targets. For the post Kyoto regime, it is necessary to incorporate mechanisms that can accelerate international efforts in the development and transfers of technologies, by combining market principles and governmental aids.

(8) Presentation 5: Taishi Sugiyama (Japan)
<<Presentation Summary>>
- By the end of 21st Century, the energy systems of both developed and developing countries would have to be quite different from what we have today (not emitting CO2). For this, technology development is needed.
- What we can do is to create a niche market or markets (where new technologies are nourished). The examples of successful niche markets include the markets for alternatives to ozone depleting substances, wind farms in Europe, automobiles conforming to the regulations to control pollutants in Japan and USA, and the desulphurization devises to remove sulfur oxides from flue gas.
- For the prevention of global warming, there should be close coordination between parties in technological development. Mutual successes can be expected, if developed countries divide the roles in technology development. For example, Europe takes on wind farm technology, US and Australia focus on carbon sequestration, and Japan concentrates in energy efficiency measures.
- The reason why wind power has been developed in EU is because of the availability of environmental conditions, such as the availability of scarcely populated area. Also there has been a political support for it.
- Considering USA and Australia, they have massive coal reserve and fossil fuel usage, which necessitate the capture of CO2 in order to enable the infinite usage of fossil fuels.
- For Japan and other East Asian countries, the cooperation for energy efficiency or energy conservation is likely to take place. As East Asian countries depend on the imported energy, there is a common interest for energy conservation.
- The significance of the Kyoto Protocol is that it enhanced political importance, increased public awareness, promoted policies and measures, and introduced new concepts such as emissions trading. The problems of the Kyoto Protocol are the adversarial negotiation over the capping of emissions, parties walking out of the Protocol, and low emissions price not encouraging technological innovation.
- Future framework needs to promote technological development. As technological development conforms to the mutual interests, international cooperation will occur more naturally.

(9) Panel Discussion (Coordinated by: Professor Mitsutsune Yamaguchi, the Faculty of Economics, Keio University)
<<What is the significance of Kyoto Protocol?>>
Sakamoto (Director, Global Environmental Affairs, METI)
It was a significant step forward as it raised interests in climate change issue, promoted the introduction of various policies and measures, and led to new international mechanisms, such as CDM.

It spread the awareness of climate issue around the world. Currently the Bush administration made Kyoto something incommunicado in the USA. I hope such trend will not last.

I find the positive aspects of Kyoto, giving flexibilities, such as CDM.

It is extremely difficult for so many countries to make decisions right away. It is a very long-term problem and we are just starting in trying to address it.

Kyoto Protocol is consistent with the UNFCCC. Without the Protocol, we cannot go further. It did have significance. But the Protocol is far from being effective with low targets. For post-Kyoto, we need to continue encouraging developed countries to make more efforts. Otherwise, developing countries find no adequate motivation to participate.

Although Kyoto Protocol brought major confusion and chaotic situation, it served as a stimulus to let people think of new ideas. Without Kyoto Protocol, nobody would have known of the Framework Convention.

<<UNFCCC sets its ultimate objective to stabilize greenhouse gas concentration at the level not dangerous to humanity. Question is how many ppms represent such concentration of stabilization?>>

550 ppm is only an example. There is considerable uncertainty. 550 ppm may be too high.

550 ppm is too optimistic (too low). It is very premature to pick an ultimate concentration ceiling.

My opinion is against making global agreement on the concentration. If the concentration of year 2100 is determined, we can calculate backward how much emission is to be allowed. Then that will give a reason for disagreement over the negotiation of caps on emissions.

We should regard concentration level as a kind of warning.

The target concentration level may be useful for the sake of discussion, but it is not wise to set a specific numerical value.

In the IPCC Fourth Assessment Report, the experts and scientists around the world are to discuss about the concentration level. We need to wait for the outcome.

<<How to let the United States and major developing countries participate in the post-Kyoto regime?>>

First, the developed countries including USA should prove that they are taking this subject very seriously. Then, it will be the time to invite developing countries to participate in it. Important thing is to provide developing countries both financial and technological assistance from rich countries.

Even in the United States, some individual states and multi-national companies are more serious about climate change. The most hopeful strategy is working with the people in these states and companies.

The viewpoint of developing countries is that per capita emissions should be equal. However, if you wait that far, the stabilization of concentration will not happen for a very long time. With that in mind, how are we going to coordinate what Dr. Zhou mentioned before, and what I mentioned just now?

My personal opinion is that I do not care for the same emissions per capita. To have similar living standards and welfare per capita is the most important thing for China.

<<Overall issues of technologies>>

Technology and technological innovation are crucial. It involves a whole mix of instruments, and a package of new agreements.

It is wrong to prejudge the technologies. The transport sector holds great promise in technological innovation and dissemination. The main focus on electricity will be carbon sequestration.

To promote technological development, it is necessary to have an international framework to set up incentives for each country to take measures. Selecting technologies or setting up targets is not to be imposed upon one country from another country, otherwise it will fail.

Carbon sequestration is to strip out CO2 from a coal-powered plant, pipe it somewhere and transfer and deposit underground. Such a plant is more expensive than those without such equipment. Even if there is a technology protocol, it will not solve the climate change problem unless we can get the protocol countries to honor their commitments.

Technology standard is a way for the dissemination of technologies, but it is difficult for a company or a country to commit to a numerical target of efficiency for individual equipment or facility. On the other hand, to develop and to adopt policies and measures for improving overall efficiency toward a certain high efficiency target may be something many countries can agree on. There may be many ways of doing it, but one way will be to agree on the adoption of various policies and measures that aim for a specific numerical target, rather than to commit to the achievement of such a target. If this kind of approach is possible, it may, to a certain degree, expel some concerns over the international competitiveness of different industries and countries.

<<Will CDM contribute to technology transfers?>>

CDM is a feasible way to have technology transfers. Chinese Government welcomes CDM and prepares to establish a management center for CDM. One obstacle is a very low pricing of CERs, which is not attractive enough to draw attention from industry sectors. Complicated rules and regulations may damage the future of CDM.

On the simplification of CDM procedures, we would like to ask the governments of Japan and other countries to make efforts.

<<About Copenhagen Consensus>>

There was a big international conference held in Copenhagen, Denmark, last May. From that conference, came the “Copenhagen Consensus.” Eight most prominent economists of the world gathered for the Conference to identify which issues have the highest priority to allocate limited resources of the world (if we have additional 50 billion dollars, how should we spend part of them over the next five years). Fortunately, we have Dr. Thomas Schelling with us here, who was one of these eight economists. At the conference, the highest priority issue was the measures to combat AIDS epidemic, the second was nutrition and poverty, the third was trade and subsidies, the fourth was the measures to prevent malaria epidemic, and the climate change was rather low in the ranking. We would like to ask Dr. Schelling to comment on how these things came about and what sort of discussion you had.

The reasons why climate change measures came out so low on the list of priorities are that, for one, the Conference tried to look at cost-benefits, and, for another, its original idea was to rank things in terms of priority for immediate expenditure of money. Therefore, we proposed to eliminate poverty over and above anything else. The trade liberalization ranked fairly high. This was expected, whenever economists got together to talk about a variety of things including trade liberalization. The climate issue became lower ranks, because the paper on climate advocated for the project that stretched out to the year 2250 with the estimated costs to be in many trillions of dollars. We did not see how spending any part of 50 billion dollars on climate change measures would make a difference, although putting way down the list did not necessarily mean that we considered it as not an urgent subject. We put climate way down the list of priorities, because we did not see how spending a little bit of money over next few years would significantly improve the cost effectiveness.